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Becoming a homeowner is more than a big decision — it’s a journey. And just like you wouldn’t leave for a trip without making sure you’ve packed all your bags, you shouldn’t embark on the road to homeownership without preparing for the possible twists and turns ahead.

If you’re looking to purchase a home in the next year, now is the time to start planning. The more you equip yourself for the process, the smoother the road will be when you get there.

Here are five steps to help you prepare for the homebuying process.

1. Build a Budget

Creating a budget is a tried-and-true method for planning and managing your finances. Preparing to take on a mortgage makes it even more crucial to keep a record of your monthly income and debts. Realistic budgeting can help you determine how capable you are of handling mortgage payments and where your finances may need some TLC.

The best way to begin formulating a financial plan is to organize your income into three categories: wants, needs and savings. An important rule to keep in mind is to be realistic, not restrictive. And be sure to leave yourself a little room for fun.

2. Get Your Debt Under Control

Work hard to get a handle on your debt in the lead-up to a home purchase. The relationship between your debts and income will play a big role in your ability to land a home loan. The kind of debt-to-income ratio you’ll need can depend on the loan type, the lender and more.

There’s a host of debt-busting strategies and tactics out there. Some would-be buyers focus on high-interest debt. Others strive to simply pay a little more than the minimum each month on their credit card bills. You can also rank debts by amount owed and knock out small debts first. This “snowball method” helps some consumers stay motivated.

The important thing is to formulate a plan and stick to it. Be sure to celebrate your victories and make changes to your plan if you consistently fall behind.

3. Get Your Credit in Shape

Credit scores can make or break your home loan chances right out of the gate. Most lenders will have a minimum credit score requirement, which can vary depending on the type of loan and more.

A 660 FICO score is a common minimum for conventional loans, but buyers may need more like a 740 to tap into the best rates and terms. Credit benchmarks can be lower for government-backed options like VA loans and FHA loans, with lenders looking for more like a 620 score.

Paying down debts can make a big impact on boosting your credit profile. FICO says your amounts owed make up about 30% of your score. Prospective homebuyers should also get their free annual credit reports from AnnualCreditReport.com and hunt for errors and bad accounts. Many credit reports contain errors that could keep consumers from obtaining credit, including home loans. You can also monitor your credit in the meantime to watch for any changes by getting your free monthly credit report summary on Credit.com.

4. Build Savings for Upfront Costs

Between down payments, earnest money, inspections and closing costs, you’ll need to have some money saved up heading into the homebuying process.

Conventional buyers typically need a minimum 5% down, although some lenders may go as low as 3%. FHA loans require a minimum 3.5% down payment. Even borrowers utilizing down payment assistance programs or zero-down loans backed by the VA or the USDA will need some cash on hand for upfront expenses.

Lenders will also review your finances to be sure your monthly mortgage payments won’t leave you high and dry. Stockpiling two to six months of living expenses can help prove you won’t undergo “payment shock” with the addition of a mortgage to your existing budget.

5. Practice Making a Mortgage Payment

Buyers with a price range in mind can get a more realistic feel for how a mortgage payment will really hit their wallet.

Use an online mortgage calculator to roughly gauge what your monthly payment would be (you can use this calculator to see how much house you can afford). If it’s more than your current housing costs, put the difference aside each month in a separate account. Make that money off limits, and see what it’s like to live without it for a few months. That can help you and your budget prepare for life with a new mortgage payment.

Following these steps doesn’t guarantee a perfect path to homeownership, but the proper preparation can mean a much smoother journey down the road.

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